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China $4.6b railway deal to test Kenya’s relations with Uganda

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The Northern Corridor, is anchored by the port of Mombasa in Kenya and has an estimated total cost of $2.1 billion. The top priority project list includes five port projects, five rail projects, and eight road improvement projects. The projects are split almost equally between the Northern and Central corridors in terms of investment cost of US$ 0.9 billion each.

The Northern Corridor, is anchored by the port of Mombasa in Kenya and has an estimated total cost of $2.1 billion. The top priority project list includes five port projects, five rail projects, and eight road improvement projects. The projects are split almost equally between the Northern and Central corridors in terms of investment cost of US$ 0.9 billion each. 

By JAINDI KISERO, The East African

Posted  Sunday, May 22   2011 at  12:19
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Chinese construction company, China Roads and Bridge Corporation, has successfully lobbied Kenya to pull out of a bilateral agreement signed with Uganda in October 2008.

The agreement committed the two neighbours to co-operate on the building of a modern railway link between the port of Mombasa and Kampala.

If the proposal by China Roads is accepted, it will not only precipitate diplomatic tensions, but force Uganda into seeking partnership with Tanzania and Rwanda to develop an alternative standard gauge railway link through the Central corridor in Tanzania.

On October 28, 2008, presidents Yoweri Museveni of Uganda and Mwai Kibaki of Kenya at State House, Nairobi, made an official declaration that the two countries would build a high capacity standard gauge railway link between them.

Subsequently, a bilateral agreement was signed by the respective ministries dealing with railways on October, 2, 2009 — with the countries committing to a seamless modern railway between them.

Kenya was — from its own resources — to build a standard gauge railway from Mombasa to Malaba, with Uganda building the link to Kampala.

Last year, Kenya went ahead and provided money in its annual budget to fund preliminary designs and an environmental impact assessment. Technical teams from the Kenya and Uganda governments worked together to harmonise the terms of reference for the feasibility studies in line with what had been agreed on under the bilateral agreement.

In the past two years, both countries have been trying to procure a consultant for a feasibility study on the project. However, as a result of appeals and objections by bidders, procurement of consultants by both countries have suffered major delays.

In March this year, the Kenya Railways Corporation (KRC) which has been procuring a consultant for the Kenyan project was about to award the job to Italian firm Italferr SPA, when the Ministry of Transport ordered them to stop the process immediately.

“Since there is no one in government who is in support of the study, there is no need to proceed with it,” said a letter by Permanent Secretary Dr Cyrus Njiru to the managing direct of KRC, Nduva Muli. “I have been directed to advise you not to go ahead with this study as this is not consistent with the consensus within government.  

These latest developments offer insight into the lobbying tactics and exploits by Chinese companies. It would appear that even as KRC technical officers and their Ugandan counterparts were working on the feasibility study — drawing terms of references and holding joint meetings — the Chinese were quietly plotting their own move.

Away from the limelight, the Chinese had signed a memorandum of understanding with then Transport minister Chirau Ali Mwakwere — in which they promised to assist in facilitating a government-to-government deal supported by concessional loans from the Chinese government.

The deal included an offer by the Chinese to conduct a free feasibility study for a standard gauge railway line between Mombasa and Nairobi on condition that if that study was adopted, China Roads and Bridge Corporation would be involved in the construction of the railway.

By coming up with a feasibility study covering the Nairobi-Mombasa stretch, the Chinese left Uganda out of  the loop.

In a letter dated March 22, 2011, the Ministry of Transport simply dumped the free feasibility study done by China Roads and Bridge Corporation on the Ugandans, and informed them that the Kenya government had decided to go the route of a government-to-government with the Chinese.

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